“This morning Credit Suisse issued a report that said that their ‘channel checks’ showed that Apple cut ‘component orders’ by 10% recently. Reports such as these were put out by Citi and Pacific Crest before Apple reported earnings as well,” Jay Somaney writes for Forbes. “I strongly recommend a look-see at the above links if you really want to get an idea of the fun and games Wall Street research is all about.”
“Strangely enough, Apple is so easily hammered lower even by the slightest piece of negative news. Pathetic I know but that’s how things have been with Apple coming up on a year now,” Somaney writes. “The analyst at Credit Suisse says, ‘In our view, the continued weak supply chain news could weigh on Apple shares for the next few weeks/quarters.’ Then he maintains his Outperform rating with a $140 price target.”
“Like I have explained in the past this is a commission generating note issued by the analyst so as to provide the brokers at Credit Suisse a reason to call their clients to sell/add/buy shares of Apple as the case may be,” Somaney writes. “It’s called an ‘actionable’ research report in the business. Don’t forget it’s year end bonus time on Wall Street now and the heads of research and the heads of retail and institutional sales (heads of the broker force) are pushing their analysts hard to make these ‘actionable’ calls.”
Read more in the full article here.
MacDailyNews Take: As we’ve written many times, as recently as July:
The stock market is a game. You either understand the “rules” and play it well, and get paid, or it’s better to sit on the sidelines and watch it for entertainment.
As we wrote this morning, those who are interested in actually analyzing companies vs. fomenting low-information investor sentiment against them, are those who listen to what Apple’s management tells them:
Even if a particular data point were factual it would be impossible to accurately interpret the data point as to what it meant for our overall business because the supply chain is very complex and we obviously have multiple sources for things, yields might vary, supply performance can vary. The beginning inventory positions can vary, I mean there is just an inordinate long list of things that would make any single data point not a great proxy for what’s going on. Apple CEO Tim Cook, January 23, 2013
Apple lower after Credit Suisse notes substantial supply-chain cuts – November 10, 2015